Argentina lifts wheat crop to record high – but cuts corn, soy area hopes

Argentine officials hiked their estimate for the newly-finished wheat harvest to a record high, even as they warned over the loss of some soybean crops to floods – although market expectations for the harvest are recovering.

Argentina’s farm ministry lifted by 1.89m tonnes to 18.39m tonnes its estimate for wheat production – a rise of more than 7.0m tonnes year on year – citing survey results which showed sowings had reached 6.36m hectares.

That was far higher than the previous estimate of 5.34m hectares, and returned sowings to levels that “were usual until a decade ago”, before the imposition of – now removed – export taxes and controls cut farmer returns from wheat and prompted them to switch to alternative crops.

While the ministry flagged that that the latest crop had suffered “significant losses due to climatic reasons”, with 800,000 hectares of plantings lost, an elevated average yield of 3.30 tonnes per hectare fuelled the rise in production to 18.39m tonnes.

Statistical debate

That is a record on the ministry’s own data, although the US Department of Agriculture sees Argentina’s wheat crop reaching 18.6m tonnes in 2007-08 – a harvest the country itself puts at 16.35m tonnes.

Indeed, Argentine crop statistics are the subject of some market debate, with the International Grains Council separately on Thursday lifting its estimate for the latest harvest by 500,000 tonnes to 16.0m tonnes.

The ministry raised its shipments for Argentina’s wheat exports in 2016-17, on a December-to-November basis, by 1.80m tonnes to 11.3m tonnes, which would represent an increase of 28% year on year.

The IGC sees Argentina’s wheat exports falling 300,000 tonnes to 9.2m tonnes for 2016-17, also on a December-to-November basis.

‘Very significant losses’

For corn, the ministry nudged higher by 50,000 hectares to 7.30m hectares its estimate for Argentina’s 2016-17 sowings, adding that crops were broadly in “good condition” in key states of Cordoba and Buenos Aires.

“In general terms, no widespread problems with pests and/or diseases are reported for the time being,” the ministry said.

However, for soybeans, the ministry cut its sowings estimate by 350,000 hectares to a five-year low of 19.45m hectares, citing losses to much publicised rains earlier this month.

Besides preventing some seedings, the rains had caused “very significant losses” in Santa Fe, and “severe losses” in Cordoba.

‘Waterlogging in low-lying areas’

Nonetheless, while stopping short of giving a production forecast, the ministry also flagged that the rains had boosted crop potential in other areas, including parts of Cordoba and Santa Fe which escaped flooding, with the Buenos Aires crop in “good general condition”.

Separately, the Buenos Aires grains exchange stuck with a forecast of 54.8m tonnes for Argentina’s soybean crop, despite flagging that rains over the last week had caused “waterlogging in low-lying areas, causing crop losses”.

Overall, the fresh precipitation mean “good moisture for soybean crops that are in the critical stages of flowering and grainfill”, the exchange said.